Question
The following table presents an incremental analysis that has not been completed, assume that the MARR is 10% per year and that the useful life
The following table presents an incremental analysis that has not been completed, assume that the MARR is 10% per year and that the useful life for each alternative is 6 years, equal to the study period. To evaluate the alternatives, they have been arranged in ascending order with respect to the initial investment:
Do nothing A C B. According to the following table, select the best answer.
On your worksheet you will need to show how you calculated the missing ROR value in the table to get credit
A--> Do nothing | C-->A | B-->C | |
Capital investment | -$15,000 | -$2000 | -$3,000 |
Annual income | 4,000 | 900 | 460 |
Annual costs | -1,000 | -150 | 100 |
Residual value | 6,000 | -2,220 | 3,350 |
ROR | 12.7% | 10.9% | ??? |
Select one: a. Alt. B b. Alt.A c. Do nothing d. Alt. C
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